AML Foundations for Corporate Structures

Introduction

Anti-Money Laundering (AML) compliance is a fundamental requirement for corporate structures operating in regulated jurisdictions. This guide outlines the essential foundations for building robust AML frameworks that align with regulatory expectations.

Risk-Based Approach

A risk-based approach is the cornerstone of effective AML compliance. Entities must:

• Conduct comprehensive risk assessments
• Identify and categorize risks (customer, geographic, product, service)
• Allocate resources based on risk levels
• Regularly review and update risk assessments

Customer Due Diligence (CDD)

Know Your Customer (KYC)

Implement robust KYC procedures to identify and verify customers, including:

• Identity verification of natural persons
• Beneficial ownership identification for legal entities
• Source of funds verification
• Ongoing monitoring of customer relationships

Enhanced Due Diligence (EDD)

Apply enhanced due diligence measures for higher-risk customers, including politically exposed persons (PEPs), customers from high-risk jurisdictions, and complex ownership structures.

goAML Reporting

The UAE's goAML platform is the central system for filing suspicious transaction reports (STRs) and suspicious activity reports (SARs). Entities must:

• Register on the goAML platform
• File reports within prescribed timeframes
• Maintain confidentiality of reporting
• Train staff on reporting obligations

AML Program Components

Policies and Procedures

Develop comprehensive AML policies and procedures that address:

• Customer onboarding and due diligence
• Transaction monitoring
• Suspicious activity reporting
• Record keeping
• Staff training

Compliance Officer

Designate a qualified compliance officer responsible for overseeing the AML program, ensuring compliance with regulations, and serving as the point of contact with regulators.

Training and Awareness

Provide regular training to all staff on AML obligations, red flags, and reporting procedures. Training should be tailored to the roles and responsibilities of different staff members.

Cross-Jurisdictional Considerations

For entities operating across multiple jurisdictions:

• Understand AML requirements in each jurisdiction
• Design integrated AML frameworks that work across borders
• Coordinate reporting obligations
• Manage information sharing and data privacy requirements

Integration with Other Compliance Frameworks

AML compliance should be integrated with other regulatory requirements, including:

• UBO disclosure obligations
• ESR substance requirements
• Tax compliance
• Sanctions screening

Best Practices

• Conduct regular risk assessments and update procedures accordingly
• Maintain comprehensive documentation of all AML activities
• Implement automated monitoring systems where appropriate
• Engage with regulators proactively
• Stay informed about regulatory developments

Conclusion

A robust AML framework is essential for corporate structures operating in today's regulatory environment. By implementing risk-based approaches, comprehensive due diligence, and integrated compliance programs, entities can meet their AML obligations while protecting their operations and reputation.